Segment Information

The Company’s reportable segments are Piping Systems, Industrial Metals, and Climate. Each of the reportable segments is composed of certain operating segments that are aggregated primarily by the nature of products offered as follows:

Piping Systems

Piping Systems is composed of the following operating segments: Domestic Piping Systems Group, Great Lakes Copper, Heatlink Group, Die-Mold, European Operations, Trading Group, and Jungwoo-Mueller (the Company’s South Korean joint venture). The Domestic Piping Systems Group manufactures copper tube, fittings, and line sets. These products are manufactured in the U.S., sold in the U.S., and exported to markets worldwide. Outside the U.S., Great Lakes Copper manufactures copper tube and line sets in Canada and sells the products primarily in the U.S. and Canada. Heatlink Group produces a complete line of products for PEX plumbing and radiant systems in Canada and sells these products in Canada and the U.S. Die-Mold manufactures PEX and other plumbing-related fittings and plastic injection tooling in Canada and sells these products in Canada and the U.S. European Operations manufacture copper tube in the U.K. which is sold primarily in Europe. The Trading Group manufactures pipe nipples and resells brass and plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products in the U.S. and Mexico. Jungwoo-Mueller manufactures copper-based joining products that are sold worldwide. The Piping Systems segment’s products are sold primarily to plumbing, refrigeration, and air-conditioning wholesalers, hardware wholesalers and co-ops, building product retailers, and air-conditioning OEMs.

During 2018, the segment recognized a gain of $1.4 million on the sale of real property and a gain of $0.7 million on the sale of manufacturing equipment.

During 2017, the segment recognized a gain of $1.5 million on the sale of the Company’s interest in Mueller-Xingrong and impairment charges of $1.5 million on certain copper fittings manufacturing equipment.

During 2016, the segment recognized impairment charges of $6.1 million on fixed assets used for product development.

Industrial Metals

Industrial Metals is composed of the following operating segments: Brass Rod & Copper Bar Products, Impacts & Micro Gauge, and Brass Value-Added Products. These businesses manufacture brass rod, impact extrusions, and forgings, as well as a wide variety of end products including plumbing brass, automotive components, valves, fittings, and gas assemblies. These products are manufactured in the U.S. and sold primarily to OEMs in the U.S., many of which are in the industrial, transportation, construction, heating, ventilation, and air-conditioning, plumbing, refrigeration, and energy markets.

During 2018, the segment recognized an insurance recovery gain of $3.7 million related to the losses incurred due to the 2017 fire at the brass rod mill in Port Huron, Michigan and a gain of $1.3 million on the sale of real property.

During 2016, the segment recognized impairment charges of $0.7 million on fixed assets related to the rationalization of Sherwood.

Climate

Climate is composed of the following operating segments: Refrigeration Products, Fabricated Tube Products, Westermeyer, Turbotec, and ATCO. These domestic businesses manufacture and fabricate valves, assemblies, high pressure components, coaxial heat exchangers, and insulated HVAC flexible duct systems primarily for the heating, ventilation, air-conditioning, and refrigeration markets in the U.S.

Performance of segments is generally evaluated by their operating income. Summarized product line, geographic, and segment information is shown in the following tables. Geographic sales data indicates the location from which products are shipped. Unallocated expenses include general corporate expenses, plus certain charges or credits not included in segment activity.

During 2018, 2017, and 2016, no single customer exceeded 10 percent of worldwide sales.

The following tables represent a disaggregation of revenue from contracts with customers, along with the reportable segment for each category:



	For the Year Ended December 29, 2018
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	1,352,875	$	—	$	—	$	1,352,875
Brass rod and forgings	—		501,472		—		501,472
OEM components, tube & assemblies	29,578		53,581		139,113		222,272
Valves and plumbing specialties	263,180		—		—		263,180
Other	—		96,008		89,956		185,964

	$	1,645,633	$	651,061	$	229,069	$	2,525,763

Intersegment sales							(17,885		)

Net sales							$	2,507,878



	For the Year Ended December 30, 2017
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	1,238,258	$	—	$	—	$	1,238,258
Brass rod and forgings	—		461,603		—		461,603
OEM components, tube & assemblies	94,383		51,707		131,448		277,538
Valves and plumbing specialties	232,309		—		—		232,309
Other	—		88,821		—		88,821

	$	1,564,950	$	602,131	$	131,448	$	2,298,529

Intersegment sales							(32,456		)

Net sales							$	2,266,073

Disaggregation of revenue from contracts with customers (continued):



	For the Year Ended December 31, 2016
(In thousands)	Piping Systems		Industrial Metals		Climate		Total

Tube and fittings	$	1,045,031	$	—	$	—	$	1,045,031
Brass rod and forgings	—		369,363		—		369,363
OEM components, tube & assemblies	145,017		69,578		119,758		334,353
Valves and plumbing specialties	239,541		—		—		239,541
Other	—		82,119		—		82,119

	$	1,429,589	$	521,060	$	119,758	$	2,070,407

Intersegment sales							(14,785		)

Net sales							$	2,055,622

Summarized geographic information is as follows:



(In thousands)	2018		2017		2016

Net sales:
United States	$	1,820,857	$	1,556,825	$	1,400,893
United Kingdom	245,458		231,039		197,039
Canada	292,798		280,140		237,162
Asia	59,730		121,295		149,875
Mexico	89,035		76,774		70,653

	$	2,507,878	$	2,266,073	$	2,055,622



(In thousands)	2018		2017		2016

Long-lived assets:
United States	$	295,735	$	238,752	$	223,099
United Kingdom	16,313		17,661		15,978
Canada	33,144		21,327		18,928
Asia	24,930		25,973		36,722
Mexico	511		608		504

	$	370,633	$	304,321	$	295,231

Summarized segment information is as follows:



	For the Year Ended December 29, 2018
(In thousands)	Piping Systems			Industrial Metals			Climate		Corporate and Eliminations			Total

Net sales	$	1,645,633		$	651,061		$	229,069	$	(17,885	)	$	2,507,878

Cost of goods sold	1,426,729			559,367			182,456		(18,152		)	2,150,400
Depreciation and amortization	23,304			7,568			5,569		3,114			39,555
Selling, general, and administrative expense	74,864			13,501			16,926		43,597			148,888
(Gain) loss on sale of assets	(2,093		)	(1,301		)	—		3,141			(253		)
Insurance recovery	—			(3,681		)	—		—			(3,681		)

Operating income	122,829			75,607			24,118		(49,585		)	172,969

Interest expense												(25,199		)
Environmental expense												(1,320		)
Other income, net												3,967

Income before income taxes												$	150,417



	For the Year Ended December 30, 2017
(In thousands)	Piping Systems			Industrial Metals		Climate		Corporate and Eliminations			Total

Net sales	$	1,564,950		$	602,131	$	131,448	$	(32,456	)	$	2,266,073

Cost of goods sold	1,369,161			506,973		98,851		(34,368		)	1,940,617
Depreciation and amortization	21,777			7,516		2,513		2,138			33,944
Selling, general, and administrative expense	74,441			13,278		9,759		43,252			140,730
Gain on sale of assets	(1,491		)	—		—		—			(1,491		)
Impairment charges	1,466			—		—		—			1,466

Operating income	99,596			74,364		20,325		(43,478		)	150,807

Interest expense											(19,502		)
Environmental expense											(7,284		)
Other income, net											2,951

Income before income taxes											$	126,972

Segment information (continued):



	For the Year Ended December 31, 2016
(In thousands)	Piping Systems		Industrial Metals		Climate		Corporate and Eliminations			Total

Net sales	$	1,429,589	$	521,060	$	119,758	$	(14,785	)	$	2,055,622

Cost of goods sold	1,228,949		420,905		89,927		(16,282		)	1,723,499
Depreciation and amortization	22,421		8,162		2,437		2,113			35,133
Selling, general, and administrative expense	67,178		13,943		9,661		45,029			135,811
Impairment charges	6,115		663		—		—			6,778

Operating income	104,926		77,387		17,733		(45,645		)	154,401

Interest expense										(7,387		)
Environmental expense										(1,279		)
Other income, net										295

Income before income taxes										$	146,030



(In thousands)	2018		2017		2016
Expenditures for long-lived assets (including those resulting from business acquisitions):
Piping Systems	$	31,362	$	18,124	$	56,286
Industrial Metals	8,066		5,322		3,302
Climate	85,471		2,191		2,045
General Corporate	37		22,518		55

	$	124,936	$	48,155	$	61,688



Segment assets:
Piping Systems	$	818,303	$	801,468	$	826,663
Industrial Metals	173,725		212,638		160,478
Climate	246,851		73,458		66,968
General Corporate	130,670		232,609		393,367

	$	1,369,549	$	1,320,173	$	1,447,476